AN ACT TO AMEND TITLES 4 AND 29 OF THE DELAWARE CODE RELATING TO THE STATE LOTTERY.

Synopsis:

The Delaware Gaming Competitiveness Act of 2012 improves the ability of the Delaware Lottery and Delaware's video lottery agents to offer services to lottery players in an increasingly competitive marketplace.

The Act authorizes internet gaming under the control and operation of the Delaware Lottery. The Delaware Lottery Office is authorized to conduct traditional lottery games over the internet. Delaware's video lottery agents are authorized to offer through their websites internet versions of the table games and video lottery offerings. All games shall remain operated by the Delaware Lottery. These offerings capitalize on a recent United States Department of Justice ruling clarifying that wagering within a state's boundaries does not violate federal law.

The Act requires the Lottery Director to provide for the security and effective administration of internet gaming, including procedures for verifying the location and identify of players, mechanisms for maintaining account security, procedures to exclude minors or other excluded persons, limits on the amount which can be wagered, and advertisements for services for compulsive gamblers.

Internet lottery games would be offered solely to persons within the State of Delaware at the current time. A person's location would be determined from a person's computer or mobile device. This territorial limitation applies to all gaming except gaming pursuant to an interstate compact or if otherwise legally authorized. Internet lottery participation would be limited to persons who meet the age requirements for equivalent non-internet games.

Revenues from the internet lottery would be distributed in a manner similar to current lottery games. The internet versions of table games and video lottery games would be distributed generally pursuant to the formulae applicable to those games, with the exception that the first $3.75 million would be retained by the Lottery to ensure the proposal is at least revenue neutral to the State. As such, revenues from those games would support services for compulsive gambling and additional purse revenue for thoroughbred and standardbred racing. The Act compels the Department of Finance to conduct a study of purse revenue generally for submission to the Governor and General Assembly on or before January 30, 2013. The Department of Finance would also prepare a report for consideration by the General Assembly on or before January 30, 2016 for reevaluation of the purses generated by internet table games.

The Act also restructures the fees currently paid by video lottery agents to incentivize those agents to reinvest up to $7.75 million in their improved competitiveness through capital investments and marketing plans.

The Act also amends Title 4 to provide that restaurants who participate as lottery agents do not have the receipts from lottery activities counted as part of the receipts not generated by food service.

The Act further authorizes the Delaware Lottery to operate the sports lottery at venues other than the video lottery agents, such as bars or convenience stores. The Lottery would prioritize applications to operate the sports lottery for those proposals most likely to foster economic growth and job creation. It also authorizes the Delaware Lottery to operate keno, a numbers game in which players select numbers and winners are chosen at regular intervals.